Letter to Unitholders
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LETTER TO UNITHOLDERS Dear Unitholders, ventures have borne fruit – MCT surpassing last year’s record high by emerged stronger and delivered a 2.6%. Correspondingly, distributable On behalf of the Board and noteworthy set of results in FY18/19. income grew 1.4% year-on-year to management, we thank you for your S$264.0 million. unyielding support in FY18/19. OUTSTANDING PERFORMANCE IN AN EVOLVING MARKET Given the upward independent Year by year, by harnessing our We are pleased to report a record revaluation of the portfolio as at collective strength and experience, DPU of 9.14 Singapore cents for the 31 March 2019, MCT’s total investment we have made sound progress in full year, up 1.1% from the previous properties increased 5.3% to S$7.0 delivering value to our stakeholders. In year. This was driven by higher billion. NAV per unit rose 7.4% to our last letter to you, we shared how contribution from VivoCity, MBC I, S$1.60 as compared to a year ago. the Manager’s stewardship has guided PSA Building and MLHF. MCT through structural shifts and Since MCT’s public listing on 27 April economic uncertainties. Capitalising MCT’s gross portfolio revenue grew 2011 at S$0.88 per unit, we have on new opportunities that had arisen 2.4% year-on-year to S$443.9 million paid out a total distribution of 62.06 from the changing landscape, our for FY18/19. NPI was S$347.6 million, Singapore cents per unit. Given 8 MAPLETREE COMMERCIAL TRUST MCT’s gross portfolio revenue grew 2.4% year-on- year to S$443.9 million for FY18/19. NPI was S$347.6 million, surpassing last year’s record high by 2.6%. Correspondingly, distributable income grew 1.4% year-on-year to S$264.0 million. MCT’s closing unit price of S$1.89 as AEI in 2015 created 15,000 square at 31 March 2019, Unitholders who feet of retail space on Basement have invested in MCT since day one 1, allowing us to capitalise on the would have received a total return shopper traffic passing between the exceeding 185%. MRT station and VivoCity’s main atrium. A year later, we increased VIVOCITY – OUR CROWN ASSET the number of food kiosks from 13 SHINING THROUGH to 21 on Basement 2, improved the Our crown asset, VivoCity, continues line of sight for some restaurants, to preserve its shine into the 12th year and introduced a popular hotpot of operations. It registered robust restaurant on Level 3. Then in 2017, performance in FY18/19, growing we converted approximately 9,200 3.0% in revenue and 3.6% in NPI square feet of anchor space on Level year-on-year. Full year shopper 1 and Level 2 into higher-yielding traffic reached 55.2 million in spite specialty space for existing tenants of transitory impact and downtime who were expanding as well as new- from enhancement works including to-mall brands. the creation of concept stores and a public library, expansion of Basement Most recently, we completed 1 and changeover of the hypermarket. VivoCity’s fourth AEI to add a public library and to extend Basement 1. VivoCity’s continued success is Being the largest scale AEI to date, the derived from a multitude of factors. whole project required meticulous Located within the southern corridor planning and execution. The AEI of Singapore, the country’s biggest started in 3Q FY17/18 when the mall offers more than a million Community/Sports Facilities Scheme square feet of NLA, which houses (“CSFS”) allowed 32,000 square feet a complete trade mix and features of commercial space on Level 3 to Left: an extensive waterfront promenade. be converted into Singapore’s largest Tsang Yam Pui With the HarbourFront MRT station library in a shopping mall in return for Non-Executive Chairman and Director nestled against Basement 2, the bonus GFA. The bonus GFA was then Sentosa Express Monorail VivoCity used to extend the existing Basement Right: Station located on Level 3, direct 1 of VivoCity, adding on seamlessly Sharon Lim Executive Director and linkages to the Singapore Cruise to the entire Basement 1 shopping Chief Executive Officer Centre@HarbourFront, and proximity experience. To improve vertical to the Sentosa Island, VivoCity enjoys connectivity and mobility within unrivalled connectivity and generous the mall, we took the opportunity shopper catchments. to add a fresh stack of escalators connecting Basement 2 and Level 1 Notwithstanding its fine physical through the new Basement 1 space. attributes, we have methodically The completion of this set of initial undertaken several asset works was marked by the June 2018 enhancement initiatives (“AEIs”) opening of the Basement 1 extension, throughout the years. VivoCity’s first which houses ten exciting lifestyle and ANNUAL REPORT 2018/19 9 LETTER TO UNITHOLDERS athleisure brands spanning 24,000 To stay ahead of the competition, Shoppers today are driven by square feet of NLA. the management diligently keeps convenience. To us, this means abreast of market transformation and providing a shopping experience that We finally welcomed the library, seizes suitable opportunities. A long- saves them time and effort. In July library@harbourfront, into VivoCity standing retail trend – consolidation 2018, we rolled out the VivoCity SG on 12 January 2019. Designed to – remains a force. This has prompted mobile application, a free one-stop serve all ages and integrated with retailers to consolidate their footprints portal for shoppers. By downloading the latest interactive technology, this into efficient networks of stores in the app and becoming a VivoRewards community asset is a meaningful high quality locations in order to member, shoppers can easily browse addition to the mall. By fostering maximise efficiency. VivoCity, as an through the mall’s directory, find a culture of learning and reading, outstanding destination mall, has been out about the latest promotions and it highly complements VivoCity’s a beneficiary of this consolidation. events in the mall, check available positioning as a family-centric During the year, established retailers parking spaces in advance, manage destination mall and also encourages such as Zara, Pull & Bear, Superdry as their membership statuses, and earn repeat visits. Its official launch well as Marks & Spencer have decided VivoRewards with minimum hassle. concludes VivoCity’s fourth AEI that to expand in VivoCity to establish their delivered over 10% of annual return on larger format concept stores. On top OFFICE AND BUSINESS PARK ASSETS investment1 on a stabilised basis. of these, we continued our rigorous EXHIBITING ROBUSTNESS approach in tenant mix management Our portfolio also consists of four In October 2018, we announced to bring in a wide variety of well- quality office and business park that VivoMart would be replaced loved brands such as Bath & Body assets, namely MBC I, PSA Building, by Singapore’s leading grocer and Works, Beauty in the Pot, Da Paolo Mapletree Anson and MLHF. multi-format retailer, NTUC FairPrice. Gastronomia and Hans Im Glück. We are pleased that the changeover MBC I stands out as a best-in-class of the former VivoMart space on Beyond physical upgrades and integrated office and business park Level 1 and Basement 2 has made tenant remixing, VivoCity’s success complex given its size, Grade-A good progress since 1 April 2019. is also buttressed by its curated mix building specifications, proximity FairPrice has started fit-out works of fun and shopper-centric activities to the CBD, complete suite of for its integrated space of 91,000 that drive footfall and sales. A key facilities and amenities, as well square feet. Specifically designed to event was the collaboration with the as its lush greenery. Its premium cater to the varied needs of today’s Walt Disney Company to present offerings have attracted a list of shoppers, the new store comprises the “VivoCity x Disney Tsum Tsum established tenants such as HSBC, a FairPrice Xtra hypermarket, a Unity Mid-Autumn: A Celebration of Love” the Info-Communications Media pharmacy and a Cheers convenience campaign from 30 August 2018 to Development Authority, Unilever and store. Meanwhile, about 24,000 30 September 2018. VivoCity Sky Samsung. With its strong attributes square feet of remaining anchor Park was filled with more than 2,000 and solid tenant base, MBC I has space from VivoMart on Level 1 and Disney Tsum Tsum lanterns and a continued to give MCT a stable Basement 2 has been recovered and record-setting 10-metre tall Mickey anchor. Mainly driven by higher fully committed by tenants including and Minnie Mouse lantern installation. rental income from new leases and Uniqlo, who is expanding its footprint The month-long festivity was the effects of step-up rents in existing in VivoCity, as well as new lifestyle overwhelmingly received by shoppers leases, MBC I posted 0.9% and 0.4% and mid-range food & beverage of all ages and widely covered by the year-on-year growth in FY18/19 (“F&B”) offerings. Scheduled for local, international and social media. revenue and NPI respectively. completion by 2Q FY19/20, the entire On 21 December 2018, VivoCity held changeover is expected to contribute its inaugural Christmas Late Night Our consistent approach in retaining approximately 40% of annual return Shopping, with over 100 retailers quality tenants and engaging them on investment on a stabilised basis2, extending their operating hours till early to secure renewals with an in addition to the positive rental uplift 2 a.m.. The Christmas celebrations emphasis on preserving cashflows from the new grocer. Collectively, also included an outdoor skating rink has paid off. In FY18/19, our office these changes will further enhance from 7 to 25 December 2018.